Analyst Jessica Levi-Ribner commented, "Having recently gained access to the public market, Sutherland Asset Management (SLD) is well positioned to take advantage of the strong opportunity set in the growing small-balance commercial (SBC) loan market. With just 0.23% share in a market where the 15 largest lenders only account for 22% of market share in total, Sutherland, in our view, stands to realize meaningful earnings growth should it be able to increase originations by only a few basis points. In addition, we believe that with book value stability, dividend growth, and a 24.7% economic return since 4Q13, SLD is a pretty compelling bull story. However, concerns regarding the company's ability to meaningfully increase originations after a slower ramp than originally expected and the long-term profitability outlook of its loans, given falling yields and whether Sutherland has access to sufficient liquidity, put us on the sidelines for now. As such, we are initiating coverage of Sutherland with a Market Perform rating and a $14 price target, which is a 15% discount to book value and takes execution risk into account. Should the company demonstrate that it is able to profitably increase originations, we could quickly become more constructive on the shares."

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